Coal projects advance but won't be final under moratorium

CASPER, Wyo. (AP) — U.S. officials on Wednesday cleared the way for a review of two mining projects that would dig up 644 million tons of coal from public lands, despite a recent government moratorium halting federal coal sales.

Wyoming, Montana and U.S. Bureau of Land Management officials approved moving forward with a multiyear evaluation of the projects located next to existing mines in the states' Powder River Basin, the nation's largest coal-producing region.

The Jan. 15 moratorium from the Obama administration allows coal sale applications to be reviewed but blocks their final approval pending a sweeping review of the federal coal program, expected to take three years.

Industry opponents had urged officials to block the applications. They cited concerns over climate change and other environmental effects from burning coal and questioned if taxpayers were getting a fair deal in a program that has sold more than $2.2 billion of coal since President Barack Obama took office, at prices below $1 per ton in many cases.

While the administration has aired similar concerns, Wednesday's vote indicates it remains unwilling for now to shut down a program that gives private companies cheap access to massive coal reserves in the Western U.S. and provides significant revenue to states.

Gillette, Wyoming-based Cloud Peak Energy and Lighthouse Resources Inc. of Salt Lake City are seeking the coal applications. Company representatives said it was crucial that work start soon on their applications in order to have coal available for mining in future years, when current reserves are depleted.

Lighthouse Resources wants to increase its annual production from 3 million tons to as much as 15 million tons at its Decker Mine in southeastern Montana, environmental manager Jordan Sweeney said. The company wants to export the fuel through new coal ports proposed on the West Coast.

Cloud Peak's Antelope Mine produces coal for U.S. markets and would continue to do so with the additional fuel it's seeking, said Blake Jones, the mine's technical services manager.

The company submitted an application involving another federal coal tract in 2005, and it was approved only last year, Jones said. Most of that coal likely will be mined by the time a decision is made on the latest application, he said.

"With this long of a process, we need to move forward to get it started," Jones said.

Greenpeace, the Sierra Club, WildEarth Guardians and other environmental groups said power plants burning the coal sought by Cloud Peak and Lighthouse Resources would generate over 1 billion tons of carbon dioxide gas, the main contributor to global warming.

"We know the federal coal system is broken. President Obama has called for a deep review of the program, and the world is turning to cleaner options," said Diana Best with Greenpeace USA.

A shift in the industry's fortunes reached a critical juncture last year, when cheaper natural gas overtook coal to become the dominant fuel used to generate electricity in the U.S.

In response to the declining demand, coal mining companies had sharply scaled back their pursuit of new leases even before the moratorium.

In November, Peabody Energy and Arch coal — the two largest U.S. coal mining companies — withdrew applications to lease almost 2 billion tons of coal in Wyoming. Other companies have asked federal officials to delay sales on three leases totaling 668 million tons.